Associated Banc-Corp (NYSE:ASB) Has Announced A Dividend Of $0.20

The board of Associated Banc-Corp (NYSE:ASB) has announced that it will pay a dividend of $0.20 per share on the 15th of September. This makes the dividend yield 4.0%, which will augment investor returns quite nicely.

Check out our latest analysis for Associated Banc-Corp

Associated Banc-Corp's Payment Expected To Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much.

Associated Banc-Corp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 38%, which means that Associated Banc-Corp would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS is forecast to expand by 24.3%. If the dividend continues on this path, the future payout ratio could be 34% by next year, which we think can be pretty sustainable going forward.

Associated Banc-Corp Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.04 in 2012, and the most recent fiscal year payment was $0.80. This implies that the company grew its distributions at a yearly rate of about 35% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend Has Growth Potential

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Associated Banc-Corp has been growing its earnings per share at 8.4% a year over the past five years. Associated Banc-Corp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Associated Banc-Corp's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 9 Associated Banc-Corp analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.